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tv   Bloomberg Daybreak Asia  Bloomberg  December 16, 2019 6:00pm-8:00pm EST

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paul: good morning. we are under one hour away from the market open. shery: good evening from new york. welcome to daybreak asia. our top story this hour. >> over the next couple weeks. shery: they hope to extend global stock rally. investors are lifted by president trump trade deal optimism. boeing tumbles after halting production of the 737 max. at least 400 planes are
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languishing in storage. an president xi jinping confirms china supports carrie lam in hong kong, but says the protests create the grimmest and most complicated challenge. paul: all right. we have the market open here in australia. it is highly likely the asx will make some record highs today. but we have a staggered open here so it is fairly quiet right now. just modest increases that we are seeing. we are going to keep a close eye on westpac, now facing its 4th investigation into these money laundering allegations just filed by the banking regulator today, announcing it will be investing getting whether broke the we have new zealand higher by almost .5%. was packed new zealand shares still in a trading halt.
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u.k. futures looking flat right now, a similar story for u.s. futures. but that may well change during the course of the day, especially after we saw some very positive gains on the u.s. equity markets trade-inspired during yesterday's trade. we will keep you up-to-date as the open continues, but for now let's get the first word news with ritika gupta. ritika: xi jinping has -- carrie lam urged hong kong society to put its development back on the right path as lam made her annual visit to beijing. >> also said this was unprecedented. what we are now facing is a situation that has never happened in hong kong after reunification. so, given the severity of the
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situation and the difficulties that we are facing, i can say that the leaders are fairly appreciative of the efforts needed in order to achieve the objective. ritika: tension remains high across india as protests continue. against the controversial new citizenship law. violents of sometimes demonstrations across the country. the new law bars undocumented muslims from seeking citizenship in india but allows undocumented migrants from other religions to do so. the pressure is rising on the u.k. prime minister boris johnson with manufacturing suffering its worst month in seven years. increasing the chance the economy will contract this quarter. plancould harm johnson's to increase government spending and keep control at the same time. business activity dropped to the
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lowest since the 2016 referendum. burn ins continue to new south wales with fears that dozens of properties are under threat in the mountains north and west of sydney. the fire has consumed almost 3 million hectares of land across the state the season, stoked by hot, dry, and when he conditions. the bureau of meteorology -- and windy conditions. global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. shery: momentum from the interim trade deal helped push stocks to more new highs. asian stocks are set to highs after u.s. and you -- our next guest says there's is more to come in 2020. , always great having you with us.
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of course we continue to see this global rally. this chart on the bloomberg showing world stocks continuing to search higher. i wonder if you take a look at technicals on this gdp sharp -- chart, we are seeing stocks at overbought territory. can this potential phase i trade deal be enough to extend the rally to 2020, or will we need more catalyst? jay: i think we have covered a fair bit of ground the last couple weeks and months. markets are up, 5%, 6% over the last few months. it is natural markets near-term have gotten overbought. but 12 months down the road we are quite constructive. we had the view of a fall risk asset rally last time we were on. we see that morphing into what we call reflation 2020. youeopolitical clouds part, have continued policy support, not only monetary policy but mall fiscal policy kicking in.
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we are going to hear the word new highs a fair bit over the next six to 12 months. theme, we have the potential trade deal with china, usmca potentially being ratified next year. is there a risk that the fed could act if we see inflation scarce? jay: that is a key -- scares. jay: i take it from the other side. they had made it clear they will let inflation run hot. we have had years of inflation being under target. now central banks will let inflation run high. that is negative for long-duration bonds. i think we are not going to -- what will be different about 20 as opposed to 2019, everything went up. in 2020 equities will do well, we think commodities will go up but long bonds will suffer. to beit seems weird
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talking about inflationscares and inflation running hot. heroic assumptions about inflation out of the bank of japan for decades now and it never materializes. is there a risk that disease spreads to the rest of the world? jay: that is clearly in the price. i a not talking about inflation going back to 3%, 4%, 5%. i'm sandy central banks will let inflation numbers go very close to target. go to 2.4%. not really act as quickly as historically has been the case. because they know we are in a u-shaped. it will be a gentle upswing in part because we have a lot of the overhangs we have spent the last couple years talking about. for us, markets are breaking out of a two-year range. the u.s. gets all the headlines with record highs day after day. but the rest of the world is
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anywhere from 15 to 30% below 2018 u.s. dollar highs. there is plenty of room to go. paul: to that end i know you find emerging markets very appealing. are your appetites there diverse? u.s. we prefer the ex- developed markets. we think there is a lot of upside in europe not only ain't equities but also currency and dividend appreciation. all those factors playing into europe. the emerging markets were quite discrete. in asia we like china, south korea, taiwan. we are focusing on the tech cycle in asia. in latin america we are keen on brazil. we think is ill has finally broken the back of inflation. real rates are 1%. if you know anything about brazil, real rates at 1% are virtually unheard of the last 30 years. we think this leads to a
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significant opportunity for growth rebound and a multiple revaluation of the brazilian equity market. so we are selective. we like brazil, china, south korea, taiwan for the most part. shery: talk about european stocks. this chart showing the large-caps discounted, almost a records that we have not -- almost to records we have not seen since 2008. jay: we are super keen on the banks of the european financials. it has been a position we have had a long time. it has been painful for a period of that time. as a european industrial cycle bottoms, negative interest rates should move positive. that should be very supportive for the banks. they sell at halftime's book. they have a dividend yield of close to 5% versus a negative yield. even if you are an income investor european banks are appealing for that basis. negative bad loans are falling.
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dividend growth growing. we are most keen on european financials. shery: you are sticking around. thank you for your insights. jay pelosky is staying with us. thate we discussed signs business funding remains ravenous. kurt: the bank of englandr ' this is bloomberg. ♪ rg. ♪
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asia. this is daybreak i am shery ahn in new york. paul: i am paul allen in sydney. the fed's latest operation brought in billions more dollars than an ad on offer. it shows how hungry primary dealers offer liquidity. watcher kathleen hays is here with us. what is causing this? kathleen: it is a couple of
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things. one is the big transition from the precrisis system of the fed's small balance sheet, its giant balance sheet, started to work it down, and financial regulation and deregulation that changed the rent -- the landscape for banks. let's jump into the bloomberg terminal. in the month of december some different things happened, but we can say the federal reserve came with an offering of $50 billion of repo. a big repurchase agreement. there were 54.2 5 billion dollars worth of offers. what you are seeing in this chart is precrisis. that was back in the day. i'm not even on the chart when i started covering the chart. they used to do repo operations all the time. they managed liquidity day in and day out. you can see in the crisis how
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they were some large repo operations. then we go into the system of fedbond purchases, the controlled the system in a different way. now the fed, in a sense, is out of the system. the balance sheet is still huge. besides the repo operations recently it has not skyrocketed, dwarfing the old system. what i meant to say is during the month of december, there were specific things that happened. there were settlements of treasury options, there are corporate tax payments to put strains on the quiddity. -- strainsal to see on liquidity. basically the repo market lately compared to september when all the volatility started is looking -- he suggests it will stay stable through the end of the year and validate with the fed says. i think their attitude now is, we go tit.
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-- we got it. that facility has been in discussion a long time. it is not like they are not thinking about it. at the press conference it was august the question he was asked about. our colleague who was there asked jay powell particularly about what they planned on doing. here is what he said. >> essentially the key to our strategy is to supply reserves in the near term through both overnight and term repo. at the same time we are raising the underlying level of reserves. i will take that now. we have said bill purchases. we also said we were willing to adapt our strategy. if it becomes appropriate for us to purchase other short-term coupon securities, then we would be prepared to do that if a need arises. kathleen: basically he said we will adjust our operations as appropriate.
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he did acknowledge, appropriately, the fed is talking about a repo facility becoming a more serious conversation. i just do not think they are worried about getting one in place right now. they are just doing what they used to do. the new york fed is in charge, you have to do these operations, gauge needs for the market. they seem to do a good job. i thought it was also cute when he said right now he is more focused on other things than the new repo facility. jay powell probably has a lot on his plate. shery: kathleen hays, thank you. let's bring back jay pelosky. think, is aou better to be focusing on other things rather than the standing repo facility, or are we under price and the risk of more turmoil? jay: i think it is great we asked jay powell that question, not jay pelosky, because he knows a lot more about it. i think it is not something we should be overly concerned about. september was a surprise so a
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caused upheaval. markets are on it, the fed is on it. i think it illustrates a key point from my perspective which is that it is a real example of policymakers providing support to the financial markets, ensuring there is liquidity, ensuring easily -- easy financial conditions. investors can focus on other things. and the opportunity to position in a market broadening out beyond simply big tech into other parts of the world, in terms of ex-u.s. other sectors like cyclical and defensive and value as opposed to growth. this repo issue is not something we need to focus on. shery: but we do have treasury settlements and corporate tax payments. should we be concerned that year-end funding could again be squeezed? jay: i don't think so. my concern is i am i jay powell, i have other things to think about. i think maybe it causes a day or
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two of uncertainty and rates go up a little bit, but to me that is not an issue. i am concerned that long rates go higher next year but that is because of an inflation scare. shery: let's talk about this one concern i have which has nothing to do with the repo market. i am wondering if perhaps all of this u.s. economic optimism we are seeing, especially with a trade deal potentially happening very soon, two weeks or so, should we be concerned that a lot of the buying and the economic david he -- economic activity has been frontloaded since we were expecting the tariffs, and then we can see a cliff as soon as we get this trade deal done? jay: i think there are two points i want to make. one is in our view, the rest of the world is bottoming first. emerging markets led us into this, europe followed, japan. the u.s. is catching down. i think the first part of next year you will see u.s. growth
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seem weaker than the rest of the world. i think that is an important point. two the optimism question, it is amazing to me that the average forecast for the year-end 2020 of the s&p is only up 4%. it is actually the lowest forecasted growth for the s&p in 15 years. there is a fair bit of headline for the trade deal etc., which is positive. if you look at how possessed -- investors are positioned and what wall street is saying, they are quite cautious. so that supports this idea there is a lot of opportunity. we happen to think it is primarily outside the u.s.. the rest of the world is much cheaper, they have less ownership. it has been a u.s.-only game for a decade since the great financial crisis. we think there is a chance that will switch in 2020. shery: jay pelosky, always great having you with us. jay: thank you. shery: we will have plenty more coming up. boeing falling after pausing output of the 737 max in
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january. more on that story, next. this is bloomberg. ♪ is is bloomberg. ♪
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paul: this is daybreak: asia. shery: let's get a quick check of the latest business flash headlines. roche has one u.s. antitrust approval for takeover of another company. it has jumped the final hurdle for the $5 million deal. roche has had to repeatedly extend, as regulators investigated how the acquisition might affect the markets for trading -- treating the blood clotting disorder hemophilia. paul: a pakistani company that makes cans for big names including coca-cola is considering a sale that could fetch up to $100 million. advisor working with an
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on the potential sale and may start the process next week -- next year. they serve markets including accra stent, afghanistan -- andy: icbc alibaba financial are teaming up to improve services and focus on areas like electronic payments and cross-border finance. it marks another move into online lending for alibaba. last week it was one of the key investors in china's largest ever funding rounds as they raked in $156 million in financing. boeing will temporarily halt production of the 737 max in january with the aircraft still grounded. shares fell in late trade extending declines already seen in the regular session. let's bring in david cycling for more.
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switching off this production line, that is challenging. surprisede people be in the nine months since the plan has been grounded they have still been producing claims. -- planes. huge production line within boeing. there is a vast supply network stretching through much of the u.s. boeing has pressed those supplies hard in recent years. pushing them to deliver on time and cheaper. pushing them much harder by hope in the production line -- it has takener them a while to push this button. paul: this is meant to be temporary what how long is temporary? how long will this drag on for? david: how long is a piece of string? the grounding first happened
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nine months ago. i think there were hopes this will get back in the air soon. it has become more and more complicated. last week there was a meeting wheren boeing and the faa the faa was essentially saying we think you are going to try bouncing this back into the air sooner than we are comfortable with. last week ryanair said he does not expect to see until the month after that in europe, with delivery not until next summer. despite the pause in production at least boeing is saying there will be no layoffs at this time. does that mean they will be able to retain the high skilled workers in this very tight labor market? david: indeed. that is exactly the problem. and particularly with the supply network, boeing has more control over what happens to its own
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workforce. within that supply network, that gets a lot tougher. so there is a risk there. at the same time these are highly specialized jobs. boeing and its suppliers are highly specialized companies. really the reason this had to happen is if you look at the cash outflow boeing has had to cope with through this, at some point they have to pull the plug. shery: what sort of operational changes have we seen the last nine months? david: it has been surprisingly little, to be honest. before this happened boeing was in the process of ramping up production. if you are a big aircraft producer you have a set monthly rate elected plump -- pump the planes out at. boeing started producing the 737 max in the middle of 2017 and it only hit 42 planes a month at the end of 2018. in a few months later this happens. they cut that at that point and
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they have been running it at 42 a month since then but they have not been delivering any. there are about 400 planes stacked up. you can see the photos of the lot around whether planes are manufactured. planesre over 400 there, about $50 billion worth of aircraft that are wasting. paul: quite a parking lot. what does this mean for boeing's bottom line? david: it was already going to be grim. if you look at their third quarter earnings in terms of cash outflow, what is really worth looking at, boeing hardly ever has operating cash outflows. the fourth quarter will continue to be bad. bearing in mind what is happening, boeing are building planes but not getting any revenue from them. paul: david figley, thank you so
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much for joining us. still to come china urges hong kong to come back on the right path as president xi reiterates support for carrie lam. this is bloomberg. ♪
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shery: let's get you a quick check of the markets at the moment. a record high gaining 2/10 of 1%. three sessions of gains. tech and consumer discretionary stocks leading the gains. on track for the rba december leading minutes, they held the 1.75%.teady at a record kiwi stocks gaining for a second consecutive session. nikkei futures under a little pressure. the japanese yen holding steady after three sessions of declines against the u.s. dollar. the topics and the you -- nikkei dollar bought level.
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unchanged.the moment wall street finishing at a record high on the trade optimism after president trump u.s.-china trade deal will be finalized in the next two weeks. reporter: japan has widened its lead over tran as the largest foreign owner of u.s. treasuries and holdings rebounded while china's stake has not changed. to 1.1 $7ncreased trillion in october from 1.1 $5 trillion a month earlier. japan overtook china as the largest non-us holder of treasury in june. the bank of england calling for new restrictions on money managers. this comes after crises at multiple asset management funds this year exposing liquidity concerns in the multi trillion dollar industry. governor carney offered insights after the stress test. >> the worst case scenario is
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effectively a no deal disorderly brexit. the probability of that scenario has gone down because of the election results and the ,ntention of the new government but the scenario itself, and that which the risks we protect the system against, has not itself changed. reporter: reserve bank of india says there is still room for more easing but much will depend on how any decision is timed. the rbis on aays current pause. policymakers are aware there is space for more action when the timing is important. the decision to hold rates this month surprised markets when india's quarterly growth slowed to a six-year low. body suing its former president and the ex of the european game michelle puccini over allegedly improper payments.
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those men deny any wrongdoing. they are already banned from any football related events until at least 2022. global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. thank you. japan and south korea have agreed to continue negotiations on export controls. they sat down monday in a bid to resolve an array of issues to restrain times. what was reached at the end of the talks yesterday? reporter: yesterday, south korean and japanese officials spoke for over 10 hours behind doors. they announced they reached afterwards was somewhat disappointing, as the only thing
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they announced was the fact that they understood, they agreed on the need to continue talks and agreed on the need for mutual understanding. korean and japanese officials considered this a step forward after south korea decided last minute to extend a military pact that they were going to opt out of in repercussion to japan imposing these export controls. the biggest difference on why these export controls were imposed in the first place, japan citing security concerns over south korea and what they do with these exported materials is still a main clash point between south korea and japan. shery: prime minister abe and president moon seemed to have toned down the rhetoric when it comes to the tensions. what can we expect from their presidential level? we know there's a summit also coming up. do.rter: we we still have yet to hear confirmation on either side that there will be a separate
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bilateral meeting. when the trilateral meeting with china takes place later this month. however, with them separately sitting down, it would be the first time in quite a long time, the first since such export curbs were imposed on south korea and the ongoing trade overte and the dispute what japan cites as security concerns. moon still has domestic audience to uphold the national court ruling over forced labor for and askingctims japanese companies to compensate what south korea considers enough. shery: thank you, joining us from seoul. kong, chineseg president xi jinping says the city is facing its grimmest and most complicated situation since returning to chinese rule as seven months of antigovernment protests continuing to challenge
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the stability. xi urged them to come back. jodi schneider joins us. see xi jinping still backs carrie lam. reporter: it is interesting. this is after more than six months of unrest in the city. carrie lam has historically low approval ratings in hong kong had ae city last month record turnout, 70 1% of the populace of the citizens who ,ould vote voted for largely overwhelmingly, pro-democracy candidates with a local election . at the same time, it really did show the populace is still yetnd this movement, and carrie lam has not really responded in a meaningful way yet continues to have the full support of beijing.
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this is coming as we continue to see protests. we saw hundreds of thousands of people take to the streets as well. it seems there's a large divide here. much of the populace of hong kong sees her as part of the problem. the money doesn't particularly support carrie lam. we've got the back of england saying that $5 billion has left hong kong during all of this turmoil. what more do we know? reporter: we are seeing that. it has been a thought early on that there would be capital up flows for hong kong. we have not seen much over the summer, but now we are starting to see that. the economy here is not doing well. it has been in a recession starting in the third quarter. we continue to see economic pressure here. retailers, hotels are really feeling it.
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we are seeing a large, large tourism, particularly from mainland china, where that had been a mainstay of the economy here. obviously with that, we are starting to see capital outflows. the property sector is still doing well here. a placeange is still where people want to live -- lift. we are still seeing lifting. at the same time, the economy is under pressure. there are thoughts that going into next year, there may be relief, but in the third quarter, we are expecting to see year on year declines, particularly in things like retail and we are not expecting the real economic woes to lift. were tonrest, if things calm down some, perhaps we would see some of that coming back. that's the message carrie lam and the central government in beijing are giving, we want to thethings return, we want
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economy to return, but the unrest has to stop first. shery: and authorities seem to be pretty adamant making it clear to the world that hong kong is doing well. we have seen them take advertising in the overseas markets as well. reporter: these ads have come out saying hong kong is back, everything is fine. that is an interesting message to tout. the economy is in a recession. they are sending different messages. but clearly they want to market hong kong as an international center to get back some of that tourism, some of the conferences that were canceled. whether an advertising campaign can do that, especially if we continue to see large protests, that is a question. clearly, they want to promote that image. it interesting that came out this week as carrie lam was meeting with officials in
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beijing and getting their full support. clearly a message they are trying to send to the world. paul: senior international editor jodi schneider in hong kong, thank you so much. still to come, growing speculation the dollar could lose its currency crown next year. this is bloomberg. ♪
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shery: this is "bloomberg daybreak: asia." i'm shery and in new york paul: and i'm a paul allen in sydney. there's growing speculation that the dollar could lose its currency crown in 2020. joining us now from singapore is mayank mishra, standard chartered global strategist. this week, strategists were saying they see the u.s. dollar getting knocked off of its throne thanks to the persistent deficits. what are your thoughts on that?
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definitely. it looks like we may be approaching the bottom of the whereled dollar smiles, some of the detailed risks that we were looking at like the u.s.-china trade tensions, brexit, those risks are fading, so sentiment is improving. the period ofme, u.s. growth exceptionalism may be coming to an end where u.s. growth continues to moderate while growth in the rest of the world is stabilizing, is not -- if not recovering. i think this environment can lead to some broad dollar weakness going into the next year. would youh currencies see performing the best against the greenback in 2020? within the emerging markets,
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we think this environment of and low volatility and can print new to support from global central banks, and this environment, we can see high-yield currencies continuing to outperform. the ideal is our top pick. we have strategies that remain in place. like in korea, we are not sure if the semiconductor industry, important for south korea, if that is up for a quick rebound. we do not expect a recovery until the middle of 2020, which means the likes of the korean won can continue to underperform. shery: where do you see the japanese yen going if you consider the u.s.-japan real yield differentials as well? thinkyou rightly say, i
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the yen continues to be driven by the differential in our view. that is where we believe that we are seeing some stabilization and growth outlook, but we are not looking at a rebound. more importantly, there is no inflation in the u.s. or anywhere else in the world that keeps the duration along with the fact that the fed has given this assurance that rate hikes remain pretty much off the table. we believe the u.s. long and is likely to remain under pressure. u.s. yield likely to continue to have a downward bias. on the other hand, if you look at what's going on in japan, the bank of japan has pretty much closed policy limits and is still unable to lift inflation expectations. the differentials are
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likely to keep the dollar yen under pressure. another macro theme aside from central banks is a trade around the world. we continue to see this potential phase one trade deal coming according to president trump within the next two weeks. when you take into account the potential we could get a pact related to currencies, how should we assess where the renminbi goes next year? the data on the trade deal is still scarce. i'm sure we heard there may be something on the currency, but we think it may have to do with transparency on fx intervention and a fixing mechanism. other than any pack on medium-term currency appreciation. let's first the outlook is concerned, we believe that given
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the volatility around the phase seeing positives and terms of the balance of payment surplus, and the this,entials in favor of there's room for modest appreciation for csi. to 686k it can go down by mid next year. we do not expect those gains to sustain over the medium term because china is still facing growth challenges and we believe the see ny will have to play a role along with other policy support measures. dollar-cny will be back to seven levels by the end of the year. paul: within the next 45 minutes, we will have minutes from the reserve bank of australia december meeting. of rba has been critically
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the weak aussie for keeping things along. it has been range bound for about four months now. do you see it staying that way? what might break the aussie out of that pattern? i referred to israel think credit factors -- idiosyncratic factors, we need to be mindful that australia is another place where we are looking at domestic challenges. that can lead to aussie underperformance over the medium-term. apart from what's happening to global growth and global trade, australia is facing a slow down as it is widely known. we think that can continue to hurt the labor market for a while and the rba may be up for some negative surprises on the unemployment rate. there's also a broad credit slowdown aboard businesses and households. even if you look at the plants
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for businesses, they do not look very promising. may beeve that the rba led to do more easing next year. we forecast to more rate cuts for the rba next year. after, they may have to rely on qe for more policy support. less supportive for the aussie dollar next year. shery: of urse we have the u. elections that support the british pound. take a look at this gt be chart on the bloomberg. we have the sterling breaking resistance falling below the key level of 85, the lowest since 2017. how is this trend going into 2020? will you consider that perhaps the euro area could and if it from better asia data that could lead to appreciation, not to mention with the u.k. economy souring, we could see the boe moving to the downside?
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we do believe in those positives that you highlighted for the euro area we think. in china stabilization and asia is positive for europe. we also expect there are growing signs of fiscal stimulus, which can be positive for the currency. we do have a positive outlook on euro. see modest appreciation next year. the comfortable majority the conservative party has come up with in the latest election aaves us with a path to smooth brexit. we think their withdrawal agreement can be passed by the january deadline. beyond that, even if there is a
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need for an extension on the transitional period, boris johnson the mandate to be able to get that in place. net net, the path to brexit looks much's smoother now. optimism aboutve fiscal stimulus in the euro area, we have the same in the u.k. as well, which can deposit for the currency. we are targeting 140 by the end of next year. that means the gbp cross can win under pressure. shery: thank you. standard chartered global effects and macro strategist, mayank mishra. coming up, robert kaplan joins us for an exclusive interview at 11:00 p.m. hong kong time. that's 10:00 a.m. tuesday from new york. this is bloomberg. ♪ this is bloomberg. ♪
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shery: this is "bloomberg daybreak: asia." i'm shery ahn in new york. paul: i'm paul allen in sydney. let's get a quick check of the headlines.ash following extended regular session losses, the board agreeing to temporarily halt production of the 737 max in the new year. this will deepen the crisis engulfing the company and ripple through the u.s. economy. . almost 400 planes are in storage. sources say boeing now accepts it can no longer turn out the max at its current pace. shery: the uber cofounder travis canalis is travis pocketing more than $2 billion since the lockup ended november 6. his remaining stake in uber is now about 1/5 of his 3 billion-dollar forging -- fortune, down from about 75% before the lockup. has: indian bill in there
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won an initial ruling for dispute. to other banks say they agreed to loan his communications almost $1 billion and 2012 on condition he gave a personal guaranty. the tycoon says he never offered such a promise. buyer's shares slid the most in almost 10 months after they decided to discontinue joint development of a treatment for chronic stroke. bloomberg news editor sophie jackman joins us to discuss the open. what happened to this drug candidate and what does it mean for sanbio? sanbio really has one flagship candidate, which has been developing for traumatic rain entry as well as stroke with the looming expectations for that drug candidate until
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january this year when it tanked, after a key clinical trial failed. in the cast -- past couple of days, the big partner pulled out in the u.s. that means they will have to go it alone. to company is still prepared file an application for traumatic brain injury for the drug in japan. they said yesterday they will push the plans back prior year. claudia look for both applications of the flagship candidates. paul: we were seeing some shares slid quite significantly. what is the significance of this for other similar companies in japan? plunger: that is a 17% in their shares yesterday, the most since february when there was that epic trial failure. despite all the declines this year, they are still heavily weighted component of the tokyo stock exchange of smaller cap
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companies. the fluctuations it has been through tell the story about how the pipelines of developments of drug companies can prove to be a wild ride for those stocks here in japan. shery: bloomberg news editor sophie jackman, thank you. let's get a quick check of the asian markets. we are seeing qe stocks higher now for a second consecutive session. kiwi dollarg the stabilize little bit. we did have the anc december asiness, and the asx 200 at record high gaining for a third consecutive session, although giving up some of its earlier gains. nikkei futures under pressure down 1/10 of 1%. this after falling in the last session as well despite, the fact that we do have the japanese yen weakening for a third consecutive session. up 4/10 of 1% on the back of wall street ending on a record high on trade optimism. paul: coming up in the next hour
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of "bloomberg daybreak: asia." andrew be joined by sullivan from pearl bridge partners. this is bloomberg. ♪
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morning, i am paul allen in sydney. asia's major markets have opened for trade. .> good evening i am shery ahn welcome to "daybreak asia." ♪ paul: our top stories, -- pres. trump: finalized over the next couple weeks. paul: asian-pacific markets hope to extend the global stock rally, lifted by president trump's trade deal optimism. richest-- china's
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provinces spooking investors. confirms support for carrie lam and hong kong, but says it creates a complicated challenge. shery: optimism over the potential trade deal between china and the u.s., sending asian markets higher. the japanese nikkei gaining 0.5% and the topix, too. both indices close to the overbought levels. the japanese yen holding steady, after weakening for the past three sessions against the u.s. dollar. we have a boj policy meeting this week. survey,g to a bloomberg expecting policy unchanged after prime minister abe implemented the $120 billion of fiscal measures. take a look at how other markets 0.1%.ading, kospi around
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the korean won fluctuating in the previous sessions. trade tensions easing, but the korean won kept in check by north korean geopolitical sessions. back.0 gaining we have seen it touch record highs and today's session. we get the rba december meeting minutes in half an hour. 0.4%, risingaining for a second session. let's get first word news. regularng extended, session late trade, agreeing to halt production of the 7 max. a move that will deepen [indiscernible] u.s.ipple through the economy. almost 400 planes are in storage. boeing accepts it can no longer
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turn out the max at its current pace. u.k. prime minister boris johnson entertains a lot to guarantee no extension to the brexit transition phase, setting up new fears of no deal at the end of next year. he plans to deliver on his election promise to ratify a free trip -- trade deal with the e.u. before december 31, 2020. says it is unlikely they will be finished in that time. the bank of england less worried of danger of a hard split with the e.u. despite several warnings over a hard brexit the u.k. into recession, governor mark carney downplaying threats they may pose to the economy. >> the worst case scenario is effectively a no deal, disorderly brexit. the probability of that scenario has gone down because of the election results and the intention of the new government.
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itself, andario that which the risk we protect the system against, have not itself changed. it has just become less likely. indiasions high across after a controversial new citizenship law. five days of sometimes violent protests across new delhi and mumbai. the new law bars undocumented muslims from bangladesh and pakistan from seeking citizenship in india, but allows migrants from other religions to do so. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. shery: thank you. newhe u.s. and europe, highs as investors cheer the improving trade outlook. president trump told reporters the much-anticipated raise one deal will be finalized in the
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next two weeks. joining us from hong kong, andrew sullivan. great to have you with us. i have to wonder, if we have seen this economic activity, market optimism, frontloaded given we were not expecting trade tensions to escalate with the upcoming tariffs that passed on december 15. could we see economic and market pullback, now that the trade deal is signed? >> yes. you have seen the euphoria at the end of last week in hong kong. to a degree even yesterday we saw more upside. it is getting to a limited extent. it is more a relief rally. people are positioning themselves with phase one in place for next year. i do not disagree, i think we have seen quite a lot of it frontloaded. we do not have a lot of the detail. it is difficult to work out which stocks are going to
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benefit longer-term. overall, how has china whether the trade war? we see some indicators pointing up, but downward pressures remain. andrew: yes, if you look inside the chinese economy, the slow down and has been a problem to them, but they still have housing issues, concerns over smaller banks. we still have corporate bond issues simmering below the surface. in many respects this provides relief for g jinping. ping. jin it does not mean other problems have gone away. we still have to see final demand coming through with countries china wants to export to. talk about hong kong. we continue to see pressure on the economy. this chart shows after property prices decline in 10 weeks in
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december, we are seeing a bit of a pickup in property prices. is there opportunity out there, especially when property developers or other stock in this market? havew: certainly we still good demands for property here in hong kong. people still get married, children still get born, families need larger space to live in. is morehe opportunity on the hotel groups who are local brands. equally within the developers, shops still operate, people require homes. it is more a matter of how they are approaching the retail side of their portfolios. i do notsidential side think there was much downside it all. there is still pent-up demand. with interest rates as low as they are and real interest rates
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in negative territory, people are still willing to buy territory in hong kong. shery: we have heard from an executive director that they do need the government's help because hotel revenue fell as much as 40% in november and december. how many opportunities out there for these companies, would continue to see unrest that at this moment seems to linger? i think you have to differentiate within the hotel groups. brand,ernational five-star hotels are international brands. they are not just arriving revenues from here in hong kong. local operators and some are operating here in hong kong and china, are seeing much more the downside of not having chinese tourists who tend to be the ones
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that occupied the three and four star hotels these companies are operating. you have to be cautious on those. there are measures of the type we saw. the protests are causing a problem for some of the retail market, but hong kong has changed from merely being a retail destination with the chinese came to buy authentic goods and take them into china. that whole business has changed as china has tightened up on laws about bringing goods in from outside and having to pay duty on them. we have to be careful. we are seeing a structural change in hong kong in the type of visitors we are getting. bridge director andrew sullivan, thank you. i want to take you to florida where we are awaiting the launch of a spacex rocket carrying two satellites.
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at cape canaveral. that spacex launching now 30 seconds away. the two satellites on board, one was built by boeing. , the japanesesat tv provider. they are over the asia-pacific. it will provide improved broadband coverage. here is the count. >> down range.
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>> lift off of falcon 9 carrying pacific nine satellite. stage one is in full power. everything looks nominal. you heard the call. >> supersonic. >> we are approaching max q, when the rocket goes through the moment of greatest aerodynamic pressure. 9 experiencing maximum aerodynamic pressure. [applause] >> the next three events we have coming up will be in rapid succession. main engine cut off, stage separation and main engine. main engine cut off is where all
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nine engines of falcon 9 shut down. you heard the call for engine chill, pre-chilling the turbopump's on the second stage. the miko will be followed by stage separation. finally, second engine start, where we like the vacuum engine on second stage. carry the to satellite to its target orbit. tt's listen into those. -- in o those. miko coming up in 20 seconds. trajectory is looking good, engines still at full power.
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on the left-hand side of your screen. >> miko. stages seven, separated. >> there we go. [applause] >> they are on your screen, the second stage engines -- engine begins to glow bright orange, we have confirmation of both stages separation. on the left-hand side of your screen you will see stage one as it begins its descent to the ship, of course i still love you. you can see the lights of cape canaveral in the background. on the right-hand side of your screen is the second stage. we are coming up to faring deployment. we jettison the faring of any unnecessary weight from the second stage.
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separation is confirmed. [applause] faring has see, separated. we are attempting to touch those on our recovery vessel. have confirmation second stage is performing nominally and we are looking good so far for today's mission. some -- signalof bermuda. paul: looks to be a successful launch of the spacex rocket carrying two rockets, the jcsat-18 and the kacific1, intended to improve broadband coverage over unserved and underserved populations of southeast asia and the pacific islands, with affordable, high-speed broadband.
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we will return to it when the stage one booster comes to land on the drone ship off the coast of florida. while we wait for that let's talk about something more earthly, particularly copper, which is an important ingredient in the rocket. the speculation that perhaps copper could be the big trade of 2020. many industry analysts expecting a lift off of that metal as global demand recovers. us, david stringer. copper a forgettable year in 2019, advancing only 4%. for 2020recast success a vote of confidence in global growth? david: absolutely. people including jeffries, quite appropriately, seeing copper as poised for lift off. that is the case. what we have seen through the course of this year, copper and
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base metals have been weighed down by worries about global growth, the implications of trade tensions between the u.s. and china. all of that likely to crimp demand. a reversal of those issues, certainly better outlook on the trade front, potentially going to see vastly improved demand from infrastructure in 2020. streets much of wall positive on copper for the next year, not just jeffries, but goldman sachs, morgan stanley, all seeing the metal in their top picks next year. it is not just demand, but on the supply side. there are low inventories. a lot of mines aging, beginning to deplete. there has not been investment in new operations. it adds up to a pretty positive outlook next year. shery: what producers are
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expected to benefit from a better outlook in copper? in terms of broadly, all the copper producers are expected to have a better year in 2020 because of potential gains for the metals. and aes likes freeport new mine in panama, also glencore. morgan stanley also favoring freeport, u.s. producer and indonesia. he also likes tech resources. all these companies seen as well-placed for 2020. gold, let's turn to topping $30 million this year. what does the industry see as a prospect for more m&a in 2020? there are certainly expectations there was a real wave of dealmaking in the gold sector, continuing into 2020.
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deal valuations topping $33 billion in 2019, the highest since 2011. 0 million dollar deal, australia buying. next year investors looking for more consolidation, more companies with one or two assets combined. that would help them reduce overhead. certainly something investors are pricing for. seniorloomberg's commodities reporter, thank you for joining us. let's get back to the spacex mission you were seeing a moment ago, stage two. now we are watching stage i, returning the drone ship. keep an eye on it. be -- you hear the
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cheering, can only mean one thing. a successful return to the drone ship, named "of course i still love you." the booster successfully landed on the launchpad. twoe two containing satellites returning to orbit. shery: a very busy december for those falcon 9 launches after the fall. lows turn to japan, interest rates making it difficult for banks to turn a profit. a bloomberg survey says that is driving a handful of regional lenders toward riskier credit. from hong joins us kong. what did the bloomberg survey show about this riskier investing behavior? andrew: we had a hunch it would regional banks taking on more risks because we had anecdotal evidence over the past two months in particular of
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this. there have been reports of specific banks doing so. we tried to shed light on what kind of credit products in particular the regional banks were increasingly getting into, that may be in the past they had not been. what we found, of 29 regional banks that replied to the survey, 20 were cutting holdings. that is a lot when you consider jgb's for the regional banks had been there mainstay in the past, they are conservative investors that previously would not have been taking risks. said those 29, 5 banks they were buying credit overseas in the bbb category, just above junk-rated securities. while five may not seem like a lot, it is a dramatic shift from the not so distant days when
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these banks would hardly be touching that riskier paper. you have negative interest rates for so long, if this was the natural progression, especially for smaller banks that cannot mitigate the effects of these negative rates as those larger megabanks. andrew: that is right, regional banks do not have the same resources as the regional banks. they area whole, bigger than anyone japanese megabanks, but the sector is hugely important to the japanese financial sector. individually they are quite small. since 2016 when the bank of japan introduced the negative rate policy, many found themselves hamstrung. they do not have the risk management resources a lot of bigger banks have and the experience investing in things like overseas credit. many are buying margin -- mortgage bank securities.
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paul: what is at stake for smaller banks? what is the risk? andrew: given the size of the sector, the government has been concerned over the past few years, knowing there is this unintended consequence of a negative policy. it is making an already bad situation worse. regional banks are suffering from depopulation of rural areas and japan is to go and other cities continue to grow. the regions are getting hollowed out. makes it hard to have a sustainable profit base for them. they have to take more risks like this. what is at stake, if they bite off more than they can chew, they could face credit rating downgrades and possibly worse, if they make losses on investments that goes sour, if the credit markets turn. paul: bloomberg's andrew monahan in hong kong, thank you. six privately owned companies in
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china's wealthiest province defaulted on their debt, or perilously close to it. with almost $10 billion at stake, seasoned investors [indiscernible] why are we seeing so many companies running into trouble? rebecca: good morning. not unusual in that we have seen people pick up across china. wealthiestf china's provinces and forms a part of their heartland. what we have seen is private firms running into trouble. because of this practice of cross guaranteeing, vouching for one another's debt. guarantees do not have to be declared on a balance sheets. wheree see is a complex
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debt is not transparent to investors, which has them particularly worried as we see refinancing and difficulties across privately owned companies. re investor fears of shandong's justified, considering this is the way it has always been done? rebecca: we do know there is a higher prevalence of cross guarantees in shandong, but part of the problem, this is a relatively obscure practice and we do not know the extent to which it affects a lot of these firms. what we have seen is fears of contagion risks spreading across the region. the challenges whether or not these fears start to drag down both good and bad credit across shandong. shery: what is the prognosis next year for these shandong firms? rebecca: at the moment it looks
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like private firms in shandong are unlikely to see a bailout or help from provincial government. at the moment we see city, local governments rapidly helping out, here and there, but there is an appetite in beijing to assist private firms in china. defaultspecting to see or struggling companies continue into next year as we see the default rate pickup in china. is one ofen shandong china's oldest economic centers, what does it mean for the rest of the country? think the issue is contained to shandong. cross guarantees tend to be focused on sectors or particular cities, or ceo's who know one another. at the moment we see the issue
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is contained to shandong. arever, a lot of shandong industrial firms that have failed to diversify the last five years, despite an aggressive spending spree. that is something we are seeing with some companies and provinces elsewhere in china. china thank you, our credit reporter. let's get a quick check of the latest business flash headlines. one u.s. asset trust approval. it has jumped the final regulatory hurdle. the deal was reached in february. had two extended steel for spark as they investigated how the acquisition may have affected the government -- market. theirtesla shares touched highest in more than a year after boosted sentiment for a stock underperforming this year.
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7%,es rose as much as touching the highest intraday level since august last year. tesla won praise from credit suisse, while the first china made model 3 cars are expected to be delivered imminently. , alibaba and ant financial teaming up to improve services and focus on electronic payments and cross-border finance. another move into online lending. last week it was one of the key investors in china's largest number of fintech funding round. $156 million in financing. paul: in a moment, i health check on australia's economic outlook. we will have the reserve bank of australia releasing minutes of its last-minute -- meeting. it did keep the cash rate on hold at 0.75%.
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forecasting through the same growth in 2021. we will see what more details we get from the minutes coming up. this is bloomberg. ♪
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shery: breaking news out of domestic, nominal and for november. year on year contractions of 5.9%. this is smaller than expected. also, easing of this huge decline seen in the previous month of 12.3%. year number the ninth consecutive month of fractions for nonoil domestics in singapore. month on month, a recovery, inound growth of 5.8% exports. this would be a rebound after two months of contraction.
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electronics year on year not looking great. a bigger decline than expected, % fall in electrics year on year, bigger than expected. much larger than in previous months. we have seen volatility on shipments from singapore. especially in the pharmaceutical sectors. electronics have seen double-digit declines for the past eight months and again in the fall -- a fall of 23.3% in november. of 5.8%.month, growth we are getting minutes of the reserve bank of australia's december meeting. 0.75%.h rate kept on at rba's february 2020 when they hand down there next decision,
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there is not one in january. income growth is a source of control -- concern for consumption, which has been sluggish. the rba saying wages are not consistent with inflation sustainability target. been a target of concern. discussing concern of the effect of lower rates on confidence. it says growth and unemployment have been broadly consistent. note australia was at a gentle turning point. we have a look at the aussie dollar not moving a great deal, 678 -- 6857. by pulling back, but higher 0.1%.
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the yield on the 10 year creeping up. shery: breaking news, hong kong seen sevenit has hong kong air lines and jets. kongve heard the hong airlines has been struggling before the antigovernment protests. now we are hearing the airport authority of hong kong has grounded seven aircraft from this embattled carrier, hong kong airlines, to protect their financial interests. the carrier continues to see headwinds, given the anti-beijing protests that have been ongoing in hong kong the past seven months. hong kong airport authority saying they have seen seven hong kong airline planes. let's get the first word headlines. xichinese president reaffirmed support for carrie lam, saying they have faced and mostmmest
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complicated situation returning to chinese rule. she says they will work together to put developments back on the right path, as lam made her annual visit to beijing. >> they said this is unprecedented. what we are facing is a situation which has never happened in hong kong after reunification. severity of the situation and the difficulties we are facing, i can say the leaders fully appreciate the effort needed to achieve the exact -- to achieve. >> increasing the chance the economy will contract. to keepld harm the plan control of the deficit at the same time. the markets as a price indicated market activity dropped to the lowest since the 2016
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referendum. the reserve bank of india says there is room for more easing and much will depend on how a decision is made in time. the r.b.i. is on a current board where policymakers are aware there is room for more monetary action. they surprised the market. football's governing body suing the former head of the games over alleged improper payment. than papers recovered more $2 million for services provided from 1998 to 2002. both men deny wrongdoing, but have been banned until 2022. global -- global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries.
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this is bloomberg. we did have the minutes from the reserve bank of australia meeting on moments ago. here to analyze more, we have james mcintyre joining us. we have the rba saying they will take another look at its outlook in february 2020. the tendency seems to revise those outlooks down. james: that has been the case because the economy has tended to underperform. andgh they have said growth unemployment were broadly consistent with forecast, if we look at those indicators, we need more data over time and that is good for the rba, the extended break. seems the labor market and things like wages and gdp outcome were a touch below. we have yet to see where the turning is in the economy. that is what was quite interesting today.
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you are referring to home loans data. this is a new number showing an increase of 2%. considering there is no data history here, too percent on what? the statistics agency promised over time these stats will become more fulsome, but the lift is showing we have a continuation of the housing finance pickup we have seen over the past few months. the housing market has turned around since april and may. it has continued to be of come -- comfort to the rba. consumers are taking time to increase spending, wanting to see income growth. what we are getting from the housing market, whether it is a continuation of five or six months of home loan approvals, the turnaround in house prices
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for the first time in two years, that means we are seeing the negative will dim as something that was dragging on consumers and we want to see that income effects from job growth starting to come through soon. the rba wanting to take some time to see the turnaround being increasing in the economy. shery: what about government support? we have seen the midyear budget, could it be supportive of the economy? james: one thing that is positive, the contraction of policy, it is not as negative as it was in the pre-election fiscal update we had shortly after. but it is still not helping the rba, not to the degree we would like or what we are seeing elsewhere. we have that announcement from
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japan in terms of consideration of could -- fiscal impulse. largeeek we saw quite a infrastructure spending. australia announced an additional four point two australian -- 4.2 billion australian dollars. the announcement from new zealand, they would need to 30ounce almost door -- billion of infrastructure. it does not seem fiscal authorities in australia are helping out the rba the way the new zealand government looks to be helping out the rbnz. that will be interesting in terms of what pace of change we see from both central banks this side of the world's dear. paul: we will run through a laundry list of everything wrong. there is no fiscal stimulus, income growth consumption, problems there.
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saying they are at a gentle turning point. james: we are seeing things turning. they did go through quite a couple of these, the way monetary policy is transmitting. question is, is it transmitting fast enough to remove the need for further policies? weak well, the policy has ened somewhat since the rba cut, or at least is lower. that is transmitting through the housing market, that turnaround in transaction activity and prices, they do see that beginning to flow through to building, construction activity, but unfortunately not the end of 2020. butave a bit of a valley, in terms of house prices and finance, we want to see that continue to turn through. of the see sectors consumer story in australia which has been impacted by the
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negative effect and the slowing and turnover of the market. ,hings like consumer durables finish -- furnishings and equipment. that is where we should see green shoots coming through. paul: thank you for joining us. we have a big interview coming presidentllas fed robert kaplan joins us for an exclusive interview at 11:00 p.m. hong kong time. if you are watching from new york, that is 10:00 tuesday morning. this is bloomberg. ♪ this is bloomberg. ♪
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shery: this is "daybreak asia." i am shery ahn in new york. paul: i am paul allen in sydney. a tumultuous year, with stabilization in 2020, hanging on. whether the street protests turn
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peaceful or lapse back into violence. consultancy,om the big brains, simon cartledge. in terms of its importance and relevancy to china, relative to where it was in the 1990's, is that starting to diminish now? simon: very much so, particularly because of growth. and they had an economy the same size as hong kong's. in depression,w recession, and looking at a hard year next year. paul: hong kong still has its status as the main conduit for cross-border money flowing into china. is that going to be enough to keep its special status alive? simon: that is its great
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strength, the financial trade center and professional services. problem 1997,the no way of adding other types of business. one of the most remarkable things of the last 20 years, china has not produced -- hong kong has not produced a major business to rival its traditional firms. shery: a lot of hong kong seems to be focused on the few tycoons. you take a look at thisgtv -- hart, hong kong home prices fell in september and october and now we see at rebound again. how important is that these properties develop and the structure of the hong kong economy sees changes? problem,at is the real the system put in place in 1997 gives power to beijing and
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established business, dominated by the property companies. neither wants to see change. it is why you see hong kong struggle. shery: how can hong kong retain its core strength as a financial hub and develop new business? i think what we are looking at is what we have seen in the protests of the last six or seven months, having a more accountable government, which can then attempt to reform parts of the economy, notably properties. paul: how critical is that going to be? visit torie lam's beijing, there appears to be no appetite in beijing to replace her. if she wants to improve things in hong kong, how critical is that issue of wealth inequality
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and property ownership? simon: it is critical in the long term. there is a long term and the medium-term program of change. we are seeing no sign either beijing or carrie lam has any interest in embarking on that type of change. one thing that will happen -- the protests will continue. paul: we do have legislative council elections coming up in 2020. there was a huge repudiation of carrie lam in the recent district council elections. what reaction are you expecting to see next year? is it going to be meaningful, whatever the result? simon: we saw what happened in the last council elections. figures got elected and the government undermined them, throughout as many as they could, disqualified them -- threw out as many as they could, disqualified them.
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it is unlikely to lead to lots of change. shery: what happens to beijing's efforts to integrate hong kong? we have seen of focus on the greater bay area. given this growing anti-beijing sentiment in hong kong, where does that leave the city? simon: that will be another problem for hong kong. it has become toxic to the rest of china. you are seeing this in the greater bay area, with a far greater development, and moved to perhaps open a stock market in macau. hong kong has a great risk of being sidelined. shery: the bank of england coming out and saying $5 billion has been pulled from investment funds in hong kong. where does that leave it as the financial hub in asia? simon: i think it will carry on.
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it is connected as a conduit for money, flowing in and out. that will carry on, just not enough to carry the city as a whole. if you are hypothetically contracted to advise the hong kong government, what would you be suggesting? simon: lots of people have been saying this for six or seven months. we will have some kind of serious, independent investigation into the events of the last six or seven months, including the reactions of the police. will reopen political reform and launch a commission to look at how we can move forward in the next few years. it is not exactly rocket science. the government seems incapable. shery: it is all about the political will.
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simon, thank you. up, tensions remain high across india as protests continue against of controversial new citizenship law. we will have the latest. this is bloomberg. ♪ ♪
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shery: this is "daybreak asia." i am shery ahn in new york. paul: i am paul allen in sydney.
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overdian billionaire won defaulted loans, told by a london judge it was implausible and unlikely. agreed to loan him almost $1 billion in 2012 on condition he gave a personal guarantee. the tycoon said he never offered such a promise. shery: westpac hit by a new requirement, and inquiry that they committed the biggest breach in money laundering laws in australian history. billion aussie dollars. the regulator looking at whether westpac [indiscernible] and will review their pay and culture. gojekindonesian megaapp looking to buy bluebird.
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aboveould pay $20 million 20% of its close in jakarta. they face mounting competition from singapore-based grab holdings. acrosstensions high india as protests continue over the controversial new citizenship law. five days of sometimes violence demonstrations from new delhi to mumbai to the eastern state of assam. shinzo abe ofster japan delayed his trip to india because of this. what are the concerns about this law? modi's critics, another step in favor of an agenda that appeals to his hard-line base. andas won reelection in may
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rolled out a series of measures to bring about this agenda favoring the hindu's majority that the bjp has pushed for years. this allows religious minorities from other countries in the neighborhood that are muslim-majority countries like pakistan and anglo --, but it does not allow in muslim migrants under that statute. asi's critics see this another discriminatory move against muslims and comes with a another push to have a citizenship registry for migrants who have been in india for years. is designed say it to weed out muslims who came esh decades banglad ago. paul: do your point that the law does not disintegrate against
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sikhs, buddhists, christians and other religions. why is narendra modi discriminating against muslims? dan: that is the question is critics are asking. it fits with the bjp's agenda. modi has been careful to not do the dirty work of this law, but if you look at state leaders, local leaders, the intention of the law is very clear. with -- in issue india with religious violence, dating back to the country's founding, during partition when and india and pakistan were created. india has a long history of this. majority in, modi's parliament gives him the power to start implementing these
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moves. is another example where he stripped them of autonomy. these are long-standing issues his party has pushed. the concern is that these protests escalate and lead to communal violence that has plagued india for years. that could eventually hurt an economy that is already not doing too well. shery: washington was following developments closely. what is the international community saying about this? dan: they are very concerned about what is going on. you mentioned shinzo abe had to cancel his trip. eshiher trip from a banglad minister had to be canceled. it threatens to stain india's image as a secular democracy, at a time when india is moving closer to the u.s., strategically.
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in a broader sense, the trumpet bringration has sought to india on board as a counterbalance against china and refers to this as the indo pacific region. administration would like to see everyone getting along and india being a reliable partner. shery: thank you, asia government managing editor. coming up, more on investment trinh's report. this is bloomberg. ♪ ♪ what are you doing back there, junior?
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since we're obviously lost, i'm rescheduling my xfinity customer service appointment. ah, relax. i got this. which gps are you using anyway? a little something called instinct. been using it for years. yeah, that's what i'm afraid of. he knows exactly where we're going. my whole body is a compass. oh boy... the my account app makes today's xfinity customer service simple, easy, awesome. not my thing.
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beijing,9:00 a.m. in welcome to bloomberg markets china open. >> we are counting down to the open of trade. stories get to your top . >> a deal will be finalized over the next couple weeks. >> markets across the asia-pacific extending the global stocks rally. bowing tumbles after deciding to pause production of the 737 max.


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